SECOND ACTION STRUCK OUT AS AN ABUSE OF PROCESS: REPORT OF FIRST INSTANCE DECISION

Searches for “abuse of process and section action” formed more than half of the search terms that brought people to this blog earlier in the week. It is clear that this is going to be a major subject of litigation over the next year, with cases effectively struck out when relief from sanctions is not granted.

I am grateful to Robert Skytner barrister of 39 Park Square Leeds for his note of the arguments and judgment of a case heard today (3rd January 2013) by DDJ Davies in Birkinhead County Court where a second action was struck out.

GIBSON -v- TELENT REPORT OF ARGUMENTS AND JUDGMENT

B E T W E E N :

Mr. Thomas Gibson

Claimant

-v-

Telent PLC

Defendant

______________________________

CASE REPORT

______________________________

Background

On the 8th day of December 2011 Mr. Gibson was driving a BMW 320 motor vehicle along Dayesbrook Lane, Liverpool. Whilst the vehicle driven by the Claimant it was stationary at a set of traffic lights it was hit in the rear by a Skoda Octavia motor vehicle, driven by an employee of Telent Plc.

Mr. Gibson suffered soft tissue injuries to his neck, lower back and left shoulder. His BMW motor vehicle was damaged necessitating repairs in the sum of £7,428. Whilst the vehicle was being repaired the Claimant took possession of a replacement motor vehicle, which was provided on a credit hire basis. The eventual cost of the hire vehicle was calculated in the sum of £80,926.

In due course the Claimant engaged solicitors and brought a claim for damages arising out of the aforesaid collision.

Procedural history of the first action

The Claim was issued on the 25th day of October 2012 and named Chartis Insurance as the Defendant [this company being the Road Traffic Insurer of Telent Plc]. The Claim was brought utilising the European Communities (Rights Against Insurers) Regulations 2002 and alleged negligence on the part of the driver of the Defendant vehicle.

The Claim was transferred to Wigan at the behest of the solicitors for the Claimant.

The Claim was allocated to the Multi-Track in January 2013 and a series of case management directions were given. The solicitors for the Claimant failed to adhere to a number of the directions and the matter came back before the court in April 2013 where an “unless order” was made.

The solicitors for the Claimant again failed to adhere to a number of the directions in the case and in May 2013 the Claim was dismissed as a result of the self-same failures on the part of the Claimant.

Failed application for relief from sanctions

The Claimant sought relief from sanction in accordance with CPR 3.9. The application was heard in August 2013 and was refused – the Claim remained struck out. The Claimant did not seek permission to appeal the decision at the conclusion of the application hearing, but did seek permission to appeal in writing, some 15 days later.The Claimant’s application for permission to appeal was dismissed “on the papers” by HHJ Allan Gore Q.C.The order made provision for the Claimant to apply for an oral reconsideration, with any such application to be made within 7 days.

Issue of the second set of proceedings

The solicitors for the Claimant did not apply for an oral reconsideration, but instead instigated fresh proceedings on the 2nd day of October 2013.

The fresh proceedings named the Defendant as Telent Plc [as opposed to Chartis Insurance] but in all other respects were substantially the same as the first set of proceedings.The Claim was transferred to Birkenhead at the behest of the solicitors for the Claimant.

The application to strike out as an abuse of process

The solicitors for the Defendant made an immediate application for the second claim to be struck out as an abuse of process on the basis that the Claimant was seeking to re-litigate a decided issue and/or that the Claimant was seeking to circumvent the provisions of and consequences to the Civil Procedure Rules.

Defendant’s Submissions

It is widely accepted that it is an abuse to bring two or more sets of proceedings in respect of the same subject matter. This can amount to harassment of the defendant in order to make them fight the same battle more than once with the attendant multiplication of costs time and stress.

It is established law that as a general rule a party should not be allowed to re-litigate issues which have already been decided by a court of competent jurisdiction[1]. Further, it has been established that there is no distinction in law between cases where the original action concludes by settlement and where it concludes by trial[2]. The position is less clear however, where the first action has come to an end not by agreement nor following a trial, but where it has concluded by way of being struck out.

The Defendant asserted that whenever a claim is struck out for misconduct by a claimant and that claimant commences a second action in respect of the same subject matter, the court should start with the assumption that some special reason has to be identified to justify the second action being allowed to proceed. The Defendant invited the court to consider the case of Ashton & Another -v- Securum Finance Ltd [2000][3] in that regard.

In particular the court was invited to consider paragraph 34 of the Judgement of Lord Justice Chadwick:

“ For my part, I think that the time has come for this Court to hold that the ‘change of culture’ which has taken place in the last three years – and, in particular, the advent of the Civil Procedure Rules – has led to a position in which it is no longer open to a litigant whose action has been struck out on the grounds of inordinate and inexcusable delay to rely on the principle that a second action commenced within the limitation period will not be struck out save in exceptional cases. The position, now, is that the court must address the application to strike out the second action with the overriding objective of the CPR in mind – and must consider whether the claimant’s wish to have a ‘second bite at the cherry’ outweighs the need to allot its own limited resources to other cases. The courts should now follow the guidance given by this court in the Arbuthnot Latham case – in a passage at page 1436H-1437B”.

5. The relevant passage in Arbuthnot Latham as referred to by His Lordship states:

“The question whether a fresh action can be commenced will then be a matter for the discretion of the court when considering any application to strike out that action, and any excuse given for the misconduct of the previous action. The position is the same as it is under the first limb of Birkett -v- James. In exercising its discretion as to whether to strike out the second action, that court should start with the assumption that if a party has had one action struck out for abuse of process some special reason has to be identified to justify a second action being allowed to proceed”.

6.The Defendant asserted and invited the Court to find that the guidance set out in Ashton & Another is particularly germane. There is a direct comparison with the position of and relationship between the Courts and the Civil Procedure Rules in 2000 [shortly after the inception of the Rules] and the position of and relationship between the Courts and the Civil Procedure Rules today [following the April 2013 reforms and the decision in Mitchell -v- News Group Newspapers].

7. The Defendant further submitted that the court ought to find that the guidance set out in Ashton & Another should be followed not just in cases where there has been inordinate and inexcusable delay, but also in circumstances where there can be said to have been intentional and contumelious default, or at least a disregard of the rules. The Defendant invited the court to consider the case of Aktas -v- Adepta [2010][4] in support of such a submission.

8. In particular the court was invited to consider paragraph 90 of the Judgement of Lord Justice Rix:

“However, all the cases make clear that for a matter to be an abuse of process, something more than a single negligent oversight in timely service is required: the various expressions which have been used are in ordinate and inexcusable delay, intentional and contumelious default, or at least a wholesale disregard of the rules”.

9.The Defendant submitted that it was incumbent upon the court when considering this potential abuse to:

(a) Undertake a careful analysis of the Claimant’s conduct of the first action, and the reasons why the same was struck out;

(b) Obtain an appreciation of the extent to which the combined effect of the first action and the current action place a disproportionate burden on the courts resources;

(c) Balance those factors against the reasons why the Claimant wishes to have a ‘second bite of the cherry’ and to so in light of the new Over-riding Objective and the decision in Mitchell.

10.It is well established that the Civil Procedure Rules have developed to reinforce the need for the courts to show decreasing tolerance of sloppy or lax conduct in proceedings and to consider much more closely the impact of litigation so conducted on resources, both of the parties to litigation themselves and also to the wider public purse and civil justice system as a whole.

11. The Defendant set out the full chronology of the first action highlighting specifically the following matters:

3 occasions when the solicitors for the Claimant ignored requests for further information;

4 occasions when the solicitors for the Claimant failed to adhere to case management directions;

The 11 week delay in making an application for relief from sanction in the first action;

Re-issuing fresh proceedings which were substantially identical to the first proceedings save for the fact that the name of the Defendant had been changed from the insurer to the Defendant in person;

The fresh proceedings were served on the Defendant’s solicitors London offices rather than the Sheffield offices which had dealt with the first action;

The fresh proceedings were transferred to Birkenhead when the correct court ought properly to have been Wigan – the court where the first action had commenced.

The Defendant highlighted the fact that the solicitors for the Claimant had offered no rebuttal of the factual matrix set out by the Defendant in the Application [despite some 3 months having passed since the application was made] and that no excuse or explanation for the failures in the first action had been forthcoming. Further, the conduct of the solicitors for the Claimant was in itself bordering on being an abuse of process in that they sought to ‘rush through’ the second set of proceedings in the hope of obtaining judgement before any defence could be filed. As such, the Court was invited to find that after careful analysis of the full history of both actions, the Claimant has not shown any ‘special reason’ why he should be allowed to continue the second action and as such the claim should be struck out.

Claimant’s Submissions

The Claimant submitted that the Defendant’s application had been brought on an entirely false premise and that the current action could not and should not be considered as a “second action” but as stand-alone proceedings.

The Claimant submitted that although the facts were exactly the same, a different Defendant and thus different cause of action had been pleaded. The Claimant’s case was that the cause of action in the first set of proceedings was based upon the European Communities (Rights Against Insurers) Regulations 2002, alleging negligence only as a secondary aspect – whereas the cause of action in the second set of proceedings was based solely upon the negligence of the Defendant driver.

It was further submitted that a Claimant did not waive his right to bring a subsequent action against a Defendant in person simply by virtue of having first brought an action against an insurer in line with his rights under the European Communities (Rights Against Insurers) Regulations 2002.

The Claimant argued that there was no abuse in the Henderson -v- Henderson sense and that the matter could not be considered res judicata as there had never been any finding of fact in respect of the substantive issues in the first action.

The Claimant sought to distinguish the current case from Ashton & Another by stating that the factual background to that case was so different to this, that parallels could not be drawn and the test set out therein was thus not applicable to the current case.

It was argued that the Claimant did not need to show “special reasons” why the claim ought to be allowed to continue and that such “special reasons” were only required where the first action was struck out as an abuse of process and not where the first action was simply struck out by way of sanction for failure to comply with directions, order of the court or rules.

Judge’s Ruling

The judge found that as a matter of plain fact the first action was not struck out as an abuse of process but due to failures to comply with rules, practice directions or court orders.

He went on to express surprise at the conduct of the solicitors for the Claimant in the first action as they could not have failed to be aware of the “tightening of the screw” in civil litigation post April 1st 2013. It was apparent that the solicitors for the Claimant had taken a casual approach to the litigation and had not acted in the best interests of the Claimant. As a result of numerous failures in the first action it was struck out and the Claimant found himself having to “start afresh” his solicitors having exhausted almost all avenues in attempting to rescue the first action.

The judge went on to say:

“The question is simple.

Is the Claimant abusing the process of the court by commencing a second action using almost identical pleadings?

There is no doubt that if the Claimant had simply re-issued proceedings against Chartis Insurance that would be a de facto abuse of process. However, the Claimant has issued fresh proceedings against the Defendant in person – Telent Plc.

It is clear that the first action was brought utilising the European Communities (Rights Against Insurers) Regulations 2002 and further that the current proceedings are identical except for the fact that there is a different named Defendant and the Claimant does not seek to rely on the European Regulations.

As I see it the two sets of proceedings are essentially the same and this is therefore the Claimant’s second attempt at bringing what is essentially the same case.

Without a shadow of a doubt the current proceedings amount to an attempt by the Claimant to have a second bite of the cherry – that cannot be anything other than an abuse.

Recent court decisions have been of some assistance but essentially it is clear from the facts in this instance that the second action constitutes an abuse and as such the Defendant’s application is granted and the Claim is struck out”.